KUALA LUMPUR: The Government's proposal to reduce the electrification cost of the RM12.48bi1 Ipoh-Padang Besar railway double-tracking project might knock "a few hundred million ringgit" off the worth of the contract, but the impact would not be significant, said MMC Corp Bhd, which was awarded the contract together with Gamuda Bhd.

However, no decision has been made and the company is still in discussions with the Government on the proposal, said MMC chief executive officer Hasni Harun.

"The plan to cut the electrification cost by the Government is for the route from Butterwoth to Padang Besar," Hasni told reporters after an agreement signing ceremony between MMC Corp Bhd and Vitol Terminal BV.

"We might lose a few hundred million ringgit if the Government decided to cut the electrification cost for that route but it won't affect much of the whole project."

Trains on the double-track line will run on electric.

The rail tracks and infrastructure of the project had been estimated to cost RM10bil while the operating and electrification systems RM2.5bil, Hasni said.

He added that the Government had so far paid RM1.2bil as progress payment to MMC.

On MMC's agreement with Dutch company Vitol Terminal BV via its subsidiary Seaport World Wide Sdn Bhd, Hasni said the contract was to lease 120 acres in Tanjung Bin, Iskandar Malaysia, to Vitol Terminal's unit ATT Tanjung Bin Sdn Bhd for 30 years at RM20 per sq ft for a terminal project.